The Samsung Group has admitted that a Samsung-affiliated company failed to develop a Rituxan (ingredient: rituximab) biosimilar. It is unclear whether Archigen Biotech, a subsidiary of Samsung BioLogics, could continue the global clinical trial on the experimental drug.

Such admission came at the Seoul Central District Court’s fourth trial Tuesday on the eight executives and employees of Samsung Electronics and Samsung BioLogics, who were indicted on charges of distorting and destroying evidence, regarding alleged accounting fraud of BioLogics.

At the trial, the accused executives of Samsung Electronics testified on documentary evidence. They mentioned the Rituxan biosimilar project, trying to refute the prosecution’s claim by explaining the connection between the prosecution's documents of evidence destruction and the original case (Samsung BioLogics’ window-dressing).

Lawyers on behalf of the Samsung executives presented the “Q&As at Samsung BioLogics Investor Relations Briefing,” written on June 29, 2015, saying the prosecution was citing this report to claim that it was possible to evaluate Bioepis’ stake because Samsung’s new unit was developing a Rituxan biosimilar before the establishment of Bioepis.

However, it was Biogen that developed Rituxan, which could not be incorporated into the asset of Bioepis, they said.

“Rituxan business failed because the product development was too late,” they said.

Rituxan, developed by Biogen, is an antibody-drug that treats autoimmune diseases such as lymphoma and rheumatoid arthritis. Samsung Advanced Institute of Technology, affiliated with Samsung Electronics, started to develop a Rituxan biosimilar (development name SALT101) in 2008, amid the group’s push for biosimilar drugs as a new business.

The Rituxan biosimilar project progressed to clinical trials but suddenly stopped in 2012 when Samsung BioLogics and Biogen jointly set up Samsung Bioepis. As Biogen was the original developer, Bioepis, which was a subsidiary of BioLogics, would have found it difficult to continue the development of the Rituxan biosimilar, observers said.

However, Samsung resumed the Rituxan biosimilar development in 2016 through a new subsidiary. Samsung Biologics and AstraZeneca established a joint venture, Archigen Biotech, in 2014. Archigen began the phase-1 and phase-3 trials on SALT101 in June 2016.

The study progressed slower than expected, however. According to ClinicalTrials.gov, a registry of clinical trials, the target completion date of the phase-3 study of SALT101 was pushed back by over a year to May 2020 from November last year. There is no more patient recruitment.

Based on Samsung executives’ arguments in the fourth trial, it seems unlikely that the trial on SALT101 will continue.

Samsung seems to have concluded that even if Archigen succeeds to commercialize the Rituxan biosimilar belatedly, the product will not be highly marketable. Rival firms such as Celltrion, Pfizer, and Sandoz have already released Rituxan biosimilars in Europe and soon to roll them out in the U.S. Samsung could enter the Rituxan biosimilar market in 2022 at the earliest and is likely to find it difficult to secure a decent market share.

Regardless of Samsung’s judgment, Archigen could continue working on the biosimilar. However, Archigen is not free from Samsung’s influence because a significant portion of Archigen’s R&D relies on Samsung BioLogics. Samsung BioLogics and AstraZeneca have their stakes in Archigen 50:50. Samsung BioLogics has invested at least 100 billion won ($84.3 million) in Archigen to date.

An official at Samsung BioLogics refused to comment on the remarks of Samsung executives at the trial.

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